Seems this latest release about projected earnings for facebook shows just how out of touch many execs are about how well a social network can be monitized.
Click thru rates for social networks are around 0.05% ( half of 1 percent), this is because they have really high pageviews per user ratio. If click thru rates were to rise pageviews per user would decline sharply as the 2 are related. The monetization of facebooks inventory is currently around 17 cents a CPM and is projected to rise to $3.78 a cpm BY 2015.
With a click thru ratio of around .05 that means that for every 2 CPM’s you get you get 1 click. Current monetization on facebook would be34 cents a click according to that yahoo chart. I think nearly everyone in the affiliate and marketing would laugh at the idea of paying $7.56 a click on facebook in the year 2015. Most of internet advertising today is based on direct marketing, and there is no one out there that can monetize all of a social neworks inventory at over 60 cents/click.
People who think that they can monetize social networking widgets at a $10/CPM or anything above 50 cents/cpm will be in for a shock. If social networks currently can’t monetize at higher then 17 cents a CPM then what makes them think they can ?
The only way that facebook could generate that much money is if they got branded ads for the site. But given that myspace, facebook, bebo, youtube and every other major site under the sun now wants branded advertisers that market is going to collaspe. The same thing happened to adsense. Before the social networks started using adsense the CPM’s were really high and since then they have steadily collapsed as they just have to much inventory.
I just can’t see this fantasy turning into reality, like many other major site owners if I started getting paid $7.56 a click my sites valuation would be in the billions.